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Financial Markets Law and Regulation

Module description

This module introduces you to key aspects of the operation of the law and regulation of financial investments with a particular emphasis on project finance and sustainable finance. You will start by exploring the role of key stakeholders that shape the financial investments such as asset owners, asset managers, and hedge funds and move to examine the regulatory structure in which these stakeholders operate at an international, EU and UK level. You will learn about the key long-term and short-term tools that investors employ to maximise their returns. You will have an opportunity to understand complex project/construction finance and reflect on the increasing role environmental considerations play in this context. You will learn about, and engage with, the Sustainable Finance, the Law and Stakeholders (SFLS) Research Network, which is collaborating with global partners to improve and transform global financial culture. This is an exciting opportunity to enhance your knowledge with regard to the role of the World Bank Group, the International Monetary Fund, the Financial Stability Board, the International Organization of Securities Commissions (IOSCO) in shaping and improving financial markets law and regulation. You will also explore the role of voluntary sustainable finance mechanisms (e.g. Principles for Responsible Investment, Equator Principles, Green Bond Principles and Global Principles for Sustainable Securities Lending in the context of increasing greenwashing regulatory/litigation risk).

The module is addressed to students in both law and business schools and is based upon the collaboration that will enhance the existing student knowledge base.

Module aims - intentions of the module

The module aims to introduce those students interested in commercial law, international law and business law to the operation of financial markets law and regulation internationally and in the UK. It aims to give you the opportunity to explore the role of key stakeholders that shape long and short-term investments. The objective is to unpack these investments by analysing complex project finance structures, bond financing, securities lending, short selling and repo from the legal/regulatory perspective. In addition, the aim is to position these mechanisms in the context of increasing importance of sustainable finance and related risks of serious fraud and greenwashing. It aims to give students interested in pursuing a career in the area of commercial law or business a sound introduction to the key principles and practices of financial markets and investments.

The module will enhance students’ prospects in taking up employment opportunities in commercial law firms, asset owners/managers, hedge funds, commercial banks, international regulators and international organisations. In addition, the students will be prepared to take up employment in audit/consultancy firms.

Intended Learning Outcomes (ILOs)

ILO: Module-specific skills

On successfully completing the module you will be able to...

• 1. Demonstrate a detailed and systematic knowledge of the key regulatory and legal structures relating to financial markets and investments;
• 2. Demonstrate deep and critical awareness of a wide range of long- and short-term investments through project finance, bond finance, short-selling and others;
• 3. Demonstrate deep and critical awareness of sustainable finance, its regulation and standardisation and associated risks (fraud and greenwashing);

ILO: Discipline-specific skills

On successfully completing the module you will be able to...

• 4. Demonstrate detailed and comprehensive knowledge of the relevant international, European Union and UK legal instruments, case-law, statutory materials and critical legal literature as well as critical awareness of their contextual implications;
• 5. Demonstrate flexible and innovative capacity to analyse complex legal/regulatory problems, identify the relative significance of applicable rules, principles and sustainable finance solutions. Select appropriate methods for investigating and critically evaluating them;

ILO: Personal and key skills

On successfully completing the module you will be able to...

• 6. Identify, retrieve and use the full range of available resources efficiently and autonomously for specific learning tasks;
• 7. Clarify, plan and undertake tasks confidently and independently, to reflect critically on the learning process and to make use of feedback effectively;
• 8. Work independently, within a limited time frame, to complete a specified task;

Syllabus plan

Whilst the module’s precise content may vary from year to year it is envisaged that the syllabus will cover the following topics:

• General history and introduction to financial markets: key stakeholders and roles;
• Long-term and short-term investments and their regulation/standardisation;
• European Union Banking regulation, in particular the EU Markets in Financial Instruments Directive;
• UK law and regulation, in particular fiduciary duty and corporate culture;
• The liability of financial institutions at common law and in equity;
• Project finance, syndicated loans, bond finance, and construction finance, inclusive of the roles of international organisations and development banks and the position of emerging markets;
• Sustainable finance, ESG and greenwashing risks and litigation.  

Learning activities and teaching methods (given in hours of study time)

Details of learning activities and teaching methods

Formative assessment

Summative assessment (% of credit)

Details of summative assessment

Details of re-assessment (where required by referral or deferral)

Indicative learning resources - Basic reading

• A. Hudson The Law of Finance (Sweet & Maxwell 2013)
• J. Dewar (ed.) International Project Finance (OUP 2019)
• S. L. Hoffman The Law and Business of International Project Finance (CUP 2013)

Indicative learning resources - Other resources

• Relevant papers by international organisations and regulators.

Key words search

Financial investments; Project finance; Sustainable finance